The redeveloped Funan Mall is redesigned around technological innovation such as facial recognition. Photography: CapitaLand
The introduction of more experiential and activity-based attractions – both retail and non-retail in nature – has helped boost footfall, maintain high occupancy rates, with the aim of increasing tenants’ sales and operating profits.
Today, F&B contributes a considerable part to a mall’s overall retail mix and strategy in attracting footfall, promoting shoppers’ experience and retaining customers as a place of meeting and community. The other growing segment is leisure and entertainment. While these tenants are not big revenue generators based on the space they occupy, they are usually considered ‘anchor tenants’ with the purpose of boosting footfall and fostering community gathering through their activities, events and workshop offerings. These include namely 24-hour gyms, fitness studios, social kitchens, indoor family games and activities, and cinemas.
The Canopy Park provides the young and young at heart hours of endless fun, from mazes, creative garden trails to bouncing nets. Photography: CapitaLand
This trend continued with the recent opening of Jewel Changi and Funan in H1 2019, which included many new-to-market F&B brands and flagship stores, but also attractions and / or open communal spaces that are not directly retail-related (or non-retail) such as the Rain Vortex, Canopy Park, Hedge Maze at Jewel Changi as well as the Wild Rice theatre and rooftop urban garden and farm at Funan. These unique attractions not only appeal to a wide group of visitors, but also through the various social media platforms, create many ‘Instagrammable’ moments, which is a very cost-effective marketing tool to increase footfall and higher spending.
Let’s take a closer look at Funan Mall..
The old Funan Mall back in 2016. Photography: CapitaLand
The newly revamped Funan Mall. Photography: CapitaLand
After a three-year redevelopment, Funan reopened on 28 June 2019 about 85 per cent larger and extensively transformed from a predominantly Information Technology (IT) retail mall with approximately 299,000 sq ft NLA to a mixed-use development comprising retail (319,000 NLA), office (214,000 NLA) and co-living apartments (412 rooms or 121,000 sq ft GFA).
Funan not only offers new experiential and activity-based retail concepts, but is also Singapore’s first omni-channel mall embracing online-and-offline platforms as well as leveraging technology with the aim of delivering more integrated and curated shopper’s experience.
Key retail mix, experiential and activity-based concept stores, key features and attractions include:
- F&B occupied about 25 per cent of floor space with about 80 stores out of just over 200 retailers;
Japan’s famous Afuri Ramen recently opened it’s first Singapore outlet at Funan Mall. Photography: Afuri Funan
- More than 30 per cent new-to-market brands, concepts or flagships including Dyson Demo Store, Brompton Junction, TFX gym, Lenovo, DJI, PPP Coffee, Afuri Ramen and many others;
- More than 60 per cent of tenants are homegrown brands;
The Tree of Life at Funan Mall. Photography: CapitaLand
- Tree of Life is part of the co-retailing concept – this permanent centrepiece structure comprising 20 retail pods provide a pop-up platform for both emerging and established brands to showcase their products, crafts, classes and workshops for a limited time period;
Leisure and entertainment offerings such as Climb Central and the 20,000 sq ft Wild Rice theatre at Funan Mall. Photography: Climb Central Singapore and Wild Rice
- Leisure and entertainment offerings such as Climb Central, the Wild Rice theatre (20,000 sq ft) and Golden Village cineplex as well as the co-living residents will help to ‘activate’ the precinct after working hours;
- Communal and open spaces such as the Urban rooftop (32,000 sq ft) and Urban Farm (18,000 sq ft) open to the public – offering diners to experience farm-to-table eating concept. Additionally, there is a futsal court on the rooftop as well;
- Utilisation of technology – sensors on the smart directories can offer personalised recommendations based demographic profile. In addition, sales data coupled with video analytics that monitor shopper traffic, behaviours and movements within the mall, will provide tenants insights to enhance product offerings and customer experiences; and
- A 24-hour drive through click-and collect facility.
The results so far..
Based on the past 10 years’ performances of Singapore’s major retail real estate investment trusts (REITs) such as CMT, FCT and SUN, the overall results suggest that REITs have been relatively successful in maintaining and / or growing their market share and operating performance amid a subdued retail environment. The key performance indicators showed growing footfall, net property income and positive rental reversions, albeit these growth rates were relatively low ranging from 1 to 3 per cent CAGR. Additionally, CMT’s tenants’ sales per square foot (psf) grew by approximately 2 per cent CAGR.
While the REITs are able to adapt to the changing retail landscape, maintain healthy occupancy rates and grow operating profits on a portfolio basis, the opposite may be happening to the older, less accessible and less well managed malls, with many reportedly struggling to stay relevant and afloat.
As such, some of these strata-titled and formerly iconic malls are currently and / or previously listed for collective sale namely, Beauty World Centre, Katong Shopping Centre, Queensway Shopping Centre and Sim Lim Square. However, not all these malls are in strive, especially those serving a ‘niche’ market such as Queensway Shopping Centre (sports) and Sim Lim Square (IT), although they are not trading at the same level as they were during their heydays. Increasingly, some of these strata units are used as test beds for new products as well as new entrepreneurs who prefer a physical store to complement their online business due to their affordability and more flexible tenures.